MART official could face big repayment bill

Decade of earnings eyed in state 'double-dipping' probe

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FITCHBURG -- The head of the Montachusett Regional Transit Authority could be forced to return hundreds of thousands of dollars he may have illegally earned over the past decade, according to a state pension official.

Mohammed Khan, administrator of the Fitchburg-based transit agency, was placed on paid administrative leave this week over concerns he has been collecting both a pension and a full-time public salary in violation of state law.

State law limits the amount of money public-pension recipients can earn upon rejoining the public-sector work force, according to John Parsons, general counsel for the Public Employee Retirement Administration Commission, the agency responsible for overseeing all state retirement systems.

After Khan retired from the Montachusett Regional Planning Commission in February of 2003, he began collecting an annual pension of $63,761 before taxes. While earning his pension, Khan continued working as the administrator of MART, earning $133,650 annually.

State law says any state pension recipient cannot work more than 960 hours a year in another public job. A typical 40-hour per week job amounts to nearly 2,100 hours per year.

Also, if the pension recipient takes another public-sector job, the new salary, when added to the pension, cannot exceed the salary currently being paid for the position from which the employee retired from, plus $15,000. Under state law, the employee is not permitted to continue working once either limit is reached.

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The State Retirement Board sent a letter to Khan on Jan. 9 notifying him of the possible violation.

"We are requesting the MART review this matter with you by analyzing your annual earnings and hours worked for each of the years from 2003 to 2013, and determine whether may have worked beyond the applicable statutory hourly limit or the earnings limit," wrote board official Nicola Favorito

If Favorito's interpretation of the law is correct, Khan could be forced to return "a lot of money" in back salary, said Parsons.

For example, Khan would be eligible to earn just $61,685 a year, based on 960 hours worked at his current hourly rate of pay -- $64.25 per hour. His hourly rate was calculated by dividing $133,650 -- his estimated present MART salary -- by 2,080 hours worked in a full-time job.

This means Khan could possibly be forced to return as much as $71,965 in 2013 salary alone. That's the difference between the $133,650 salary he is now receiving and the $61,685 amount he is restricted to earning under state pension regulations.

In a Thursday statement, Wong said she immediately placed Khan on paid administrative leave after being informed Tuesday evening that state retirement officials were investigating his workload. Wong then named the agency's deputy administrator, Bruno Fisher, as acting administrator.

Bruno has since placed two additional employees on paid administrative leave as part of the investigation, said Wong. Wong and transportation officials have not identified these employees.

In a Thursday night interview, Khan repeated his assertion that he believed there was no conflict in collecting a pension while also taking a salary at MART because he does not collect state health benefits and no longer contributes to a pension in his current job. Parsons said the law is applicable to all public-pension recipients whether or not they receive benefits in their current public-sector job.

Parsons also said he believed Khan's alleged double-dipping was uncovered because MART is in the process of joining a state retirement system. Khan was planning to retire from MART at the end of January before his suspension.

MBTA retirees are able to work full-time jobs in the public sector while collecting pensions because the agency has a private retirement system, said Parsons. For example, James Scanlan, who earns more than $115,000 as the head of the Lowell Regional Transit Authority, left a job at the MBTA after 24 years with a $68,000 pension and free health benefits.

"He is not subject to the post retirement law because he is not a state retiree," Parsons said.

Khan believes this is unfair.

"If the MBTA is exempt, we should be exempt, too," he said.

Khan, who is 75, grew up in Dhaka in what is now Bangladesh. He first came to the U.S. in 1964 as a Fulbright Scholar and studied city planning at Harvard, returning to Bangladesh in 1966. He applied for immigration and returned in 1968 and until 1970 taught city planning at Boston College and urban geography at Boston University.

In 1970, Khan became transportation planner for the city of Springfield and after few more municipal jobs, landed in Fitchburg in 1975 as the transportation planner for the Montachusett Regional Planning Commission. He helped form MART in 1978 and worked for both entities until 2003.

The Massachusetts Department of Transportation intends to refer the matter to the Inspector General's office for investigation.

Transportation officials have also been dispatched to MART headquarters in Fitchburg to collect and catalog information and documents that might be relevant to the IG's investigations. MART officials have been asked to secure all documents related to the employment and payment of salary to any employee previously employed by another public entity.

Khan called the pension law he has found himself entwined in "dysfunctional" and expressed hope that the Legislature reforms it. He also acknowledged that he may be forced to return a significant portion of his earnings over the past decade.

"I'm concerned I might have to pay back part of it," he said. "That's fine. I do not disagree if that's what the law is."

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